MY THOUGHTS ON SILICON VALLEY BANK COLLAPSE

MY THOUGHTS ON SILICON VALLEY BANK COLLAPSE

Jason MalabuteBusiness Member
Accountant · Los Angeles, CA · Member since 2016 · 2k+ posts · 904 votes

The following are my thoughts on the collapse of Silicon Valley Bank and any thoughts of upcoming bailouts. As an advocate for responsible financial practices, I believe that the government should not bail out banks that collapse due to their own risky investments. Such bailouts not only create moral hazard but also set a dangerous precedent that banks can engage in reckless behavior with little or no consequences.

Depositors should not be bailed out for savings over the $250,000 FDIC limit because they should share the risk of banking with a particular institution. When depositors place all their cash in one bank, they are essentially placing all their eggs in one basket, which can be risky. Therefore, it is important for depositors to diversify their savings across multiple institutions to mitigate risk. Additionally, depositors should consider investing their money in assets like real estate, which can provide long-term returns and mitigate the risks that come with being too liquid. Ultimately, depositors should take responsibility for their financial decisions and not rely on the government to bail them out in the event of a bank failure.

When the government bails out a bank, it sends a message that the bank's risky investments were acceptable and that taxpayers should bear the cost of the bank's mistakes. This creates a moral hazard, where banks are encouraged to engage in risky behavior with the knowledge that the government will bail them out if things go wrong. This, in turn, puts taxpayers at risk and undermines the integrity of the financial system.

Moreover, when the government bails out a bank, it effectively rewards poor financial management and risk-taking. This sends the message that there are no consequences for engaging in such behavior, which can ultimately lead to a culture of complacency and a lack of accountability in the banking sector.

In addition to the moral hazard, bailing out banks can also be costly for taxpayers. The funds used to bail out a failing bank are typically drawn from the public coffers, meaning that taxpayers foot the bill.

As a real estate investor, I am aware that financial distress in the market can create great buying opportunities. An economic downturn can create great buying opportunities in commercial real estate for savvy investors. When the market is down, sellers are more flexible on price and terms, and may be more willing to negotiate seller financing or other creative financing options. Additionally, there is likely to be less competition from other buyers as money may be less accessible. This can be particularly beneficial for real estate investors who have preexisting relationships with investors who have cash, creativity, and resourcefulness, allowing them to take advantage of market opportunities that others may miss. Ultimately, an economic downturn can be a great time for investors to acquire high-quality assets at a discount and position themselves for long-term success in the real estate market. With that said, as a real estate investor I would be extra careful with what banking institution I do business with and put my reserve money in moving forward.

In conclusion, I strongly believe that banks and depositors should not be bailed out over the FDIC amount. Bailing out banks creates moral hazard, sets a dangerous precedent, and can be costly for taxpayers. As a society, we should encourage responsible financial practices and hold banks accountable for their actions, rather than rewarding them for their mistakes.

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Realtor · Longmont, CO · Member since 2021 · 577 posts · 631 votes
3y

If this was a crisis that happened because of risky investments I would agree. That being said, this is a crisis that was created because the bank chose the safest asset on earth (US treasury bonds) to put their depositors money into and the Fed kept rates low too long and then raised rates too fast, and focused on lagging indicators all the while knowing they risked collapsing the banking system. If the Fed does not step in, it is likely that there will be a rush on the banks, and these banks will not be able to liquidate assets fast enough to handle the pressure and collapse. As RE investors we like buying opportunities, but we should not like government created banking system failures. 

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  • J ScottPro Member
    Moderator
    Investor · Sarasota, FL · Member since 2008 · 18k+ posts · 17k+ votes
    3y

    I'm guessing you only purchase stabilized property.  So you think you're not speculating?

    But, I assume you have no guarantee that your income, occupancy, and expenses will be the same as prior to purchasing a property, correct?

    Assuming that's the case, you're absolutely speculating.

    Also, I assume that you don't receive income until after you purchase your properties.  So, you pay a sale price today for income that you haven't yet received. Is that correct?

    if so, I'm pretty sure that meets your definition of speculation above. Paying today for income you hope/expect to receive in the future.

    Btw, for those of us who purchase value add property, it's essential that we use proforma (i.e., forward looking) data to model the returns.

    So yes, we're definitely speculating as well.

    That's what investing is -- speculation.

    Btw, if you believe you're not speculating, and you're earning over the risk-free rate of return, I'd love to hear your secret!

  • Lender · Charlotte, NC · Member since 2016 · 374 posts · 172 votes
    3y

    Bailouts are nothing more than a tax and new debt that we all take on without our permission.

  • Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes
    3y
    Quote from @J Scott:

    I'm guessing you only purchase stabilized property.  So you think you're not speculating?

    But, I assume you have no guarantee that your income, occupancy, and expenses will be the same as prior to purchasing a property, correct?

    Assuming that's the case, you're absolutely speculating.

    Also, I assume that you don't receive income until after you purchase your properties.  So, you pay a sale price today for income that you haven't yet received. Is that correct?

    if so, I'm pretty sure that meets your definition of speculation above. Paying today for income you hope/expect to receive in the future.

    Btw, for those of us who purchase value add property, it's essential that we use proforma (i.e., forward looking) data to model the returns.

    So yes, we're definitely speculating as well.

    That's what investing is -- speculation.

    Btw, if you believe you're not speculating, and you're earning over the risk-free rate of return, I'd love to hear your secret!


     This seems to be devolving into an argument of semantics. 

    With this logic for viewing speculating, it can be argued getting in a car and driving to a location is "speculating" on one getting to where there going because it's not an assured, 100% guarantee certainty of getting there. And really, any and every action in life would be speculating, every investment in existence would be a speculative investment. 

    Yes, that semantic argument, yup there is going to be a variable of uncertainty because ONLY death is a 100% guarantee certainty in life, that is very literally the only one. But CLEARLY there is a widely held comprehension of what makes something a categorical speculative action and others not. 

    I, the ESL kid, am not going to dare touching on defining the difference in the English use of such, but there is also kind of a point there that if I, an ESL kid "get-it", well I kind of would expect it should be rather easy for all others to as well. 

    But yeah, your right, I do not get any "Revenue Fairy" popping in at closing to to hand me my guarentee of rents to post going forward. So I suppose everything is speculation than. And with that it then becomes a question of to what degree something is speculative. 

    yes, value-add plays are totally speculation based which is a reason those operators doing great at such deserve all the accolades and kudos because there doing one hell of a hard thing, takes exceptional talent to do such. 

    FYI; I was one of those for several years, as Director of field operations for one of the "big boys" in that space. Our best year we nearly hit 5,000 units turned. Easy it was not. 

  • J ScottPro Member
    Moderator
    Investor · Sarasota, FL · Member since 2008 · 18k+ posts · 17k+ votes
    3y
    Quote from @James Hamling:

     This seems to be devolving into an argument of semantics. 

    With this logic for viewing speculating, it can be argued getting in a car and driving to a location is "speculating" on one getting to where there going because it's not an assured, 100% guarantee certainty of getting there. And really, any and every action in life would be speculating, every investment in existence would be a speculative investment. 

    Yes, that semantic argument, yup there is going to be a variable of uncertainty because ONLY death is a 100% guarantee certainty in life, that is very literally the only one. But CLEARLY there is a widely held comprehension of what makes something a categorical speculative action and others not.

    It's not semantics at all...  You use the term "speculation" as if it's a bad thing, or as if it's something you would never do.  You talk about basing decisions on future earning potential as if it's a bad thing, or as if it's something you would never do.

    But, you do.  We all do.  That's literally what investing is about -- doing our best to discount the value of future earnings to a price that makes sense today.

    As you pointed out, most actions in life are speculating.  But, there are degrees of speculation.  And those degrees are defined by risk.

    Low risk = low speculation.  High risk = high speculation.

    When you buy a property, you are speculating.  By definition.

    If you model based on a one-year pro-forma operating P&L, you are speculating less (you have lower risk) than if you're modeling off of a 10 pro-forma operating P&L (where you have more risk).

    So, when you say that investing off of future earnings potential is speculation, that's a given.  

    We're always investing based on future potential earnings.

    It's just a question of how far into the future and your level of confidence on the pro-forma.

  • Investor · Boston, MA · Member since 2015 · 1k+ posts · 3k+ votes
    3y
    Quote from @Bruce Woodruff:

    You cannot absolve the Fed or the federal government for any of their role in this. Who does the FED get its marching orders from? Do they do this all on their own? Doubtful.  it would be like absolving the soldiers in Germany in 1939 from any guilt whatsoever. They knew what they we're doing..


  • Member since 2019 · 7k+ posts · 4k+ votes
    3y
    Quote from @J Scott:

    I'm guessing you only purchase stabilized property.  So you think you're not speculating?

    But, I assume you have no guarantee that your income, occupancy, and expenses will be the same as prior to purchasing a property, correct?

    Assuming that's the case, you're absolutely speculating.

    Also, I assume that you don't receive income until after you purchase your properties.  So, you pay a sale price today for income that you haven't yet received. Is that correct?

    if so, I'm pretty sure that meets your definition of speculation above. Paying today for income you hope/expect to receive in the future.

    Btw, for those of us who purchase value add property, it's essential that we use proforma (i.e., forward looking) data to model the returns.

    So yes, we're definitely speculating as well.

    That's what investing is -- speculation.

    Btw, if you believe you're not speculating, and you're earning over the risk-free rate of return, I'd love to hear your secret!


     you could say it like this:

    in general, flipping is like medium to high risk speculation investment in term of financial modelling and future value.
    while individual stock ownership is very high-risk speculation. 

    The index is perhaps medium risk speculation.

    buying crypto is like are you crazy super high risk speculation.

    buy and hold maybe low risk speculation.

    it's all speculation, but in a different level

  • Member since 2019 · 7k+ posts · 4k+ votes
    3y

    my own idea related to Real Estate Investments vs Stock investments , Real Estate Investment has price InEfficiency discovery while Individual Stock investment has price efficiency, with stock everyone is chasing the same price and the same liquidity pools, whether you are average Joe or Berkshire money manager, you see the same screen.

    Not with real estate, in real estate there're lot of price inefficiency, the buyer pool is different, the supply is different, he quality of the house is different the liquidity for particular city/block is also vastly different, and this.......create an opportunity, that's why some of you guys here are the biggest flipper in BP. 

    Also since you are not the debt holder (SVB bank is the note holder) of real estate instrument, then your investment is actually pretty much lower risk (compare to stock investor guy), this is perhaps the point that James trying to say. 

    Just imagine it like this, there's bank out there willing to lend us $1mil with rate of 2% (SVB), so our home value is $1.1 mil when we purchase, two years later, the rate is 5% , the note holder (SVB) is losing money obviously when rate going high, but our real estate investment price is now $1.3mil according to appraisal.

    Now if you are stock guy, with DCF value, your $1000 Tesla stock is only worth a $500 Tesla stock NOW after rate hike, why, becoz the DCF is a derivative of interest rate.

    So direct real estate investment , in US is always always always has lower risk than almost any other investment because it's being valued differently. This may help what James trying to explain as well.

  • Member since 2023 · 97 posts · 60 votes
    3y

    Don't forget, @Carlos Ptriawan, the long PUT option that you, the debtor of real estate, hold.  You exercise that option at your discretion when it is most advantageous for you.  

    Can you imagine what would happen if the tables were "even" in this regard?   "Hi Carlos, interest rates have increased, so we're just going to call your mortgage."  Or, "We see the neighborhood is on the upswing, and we're pleased with your decision in that regard.  We'll be calling the mortgage.  You can keep the house if you can raise the capital in the next 30 days."

  • Member since 2019 · 7k+ posts · 4k+ votes
    3y
    Quote from @Christopher Sandys:

    Don't forget, @Carlos Ptriawan, the long PUT option that you, the debtor of real estate, hold.  You exercise that option at your discretion when it is most advantageous for you.  

    Can you imagine what would happen if the tables were "even" in this regard?   "Hi Carlos, interest rates have increased, so we're just going to call your mortgage."  Or, "We see the neighborhood is on the upswing, and we're pleased with your decision in that regard.  We'll be calling the mortgage.  You can keep the house if you can raise the capital in the next 30 days."


     haha yes, that's why good Lord, there's government institution like Fannie Mae that protects us so the bank can't do something like that.

    in country outside US, FM doesn't exist, 30YFRM product is not there, what's available is only 2 year ARM so that's more even credit risk between lender and homeowner.

    How the credit system works in this country is really helping the landlord/homeownership to be having more advantages.

  • Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes
    3y
    Quote from @Bill F.:
    Quote from @Bruce Woodruff:

    You cannot absolve the Fed or the federal government for any of their role in this. Who does the FED get its marching orders from? Do they do this all on their own? Doubtful.  it would be like absolving the soldiers in Germany in 1939 from any guilt whatsoever. They knew what they we're doing..



     What the?!..... How in the hell did HITLER come into this!......

  • Member since 2019 · 7k+ posts · 4k+ votes
    3y

    do you have opinion about first republic bank ?
    https://www.npr.org/2023/03/16...

    Now you folks could criticize their CEO action and why this bank is at fault but saved by the bigger bank LOL

  • Member since 2022 · 1 post · 0 votes
    3y
    Quote from @Carlos Ptriawan:

    do you have opinion about first republic bank ?
    https://www.npr.org/2023/03/16...

    Now you folks could criticize their CEO action and why this bank is at fault but saved by the bigger bank LOL

    @Carlos Ptriawan people pull money out of little banks and stick it in big ones because of fear. Big banks say here take it all back.

  • Rental Property Investor · Round Rock, TX · Member since 2016 · 1k+ posts · 971 votes
    3y

    Hey'all, you been all baited by OP with his ChatGPT generated post. Here is a rebuttal to his "deep thoughts on the collapse of SVB", also thanks to ChatGPT in 3 seconds:

    While I understand and appreciate the sentiment behind your argument, I must respectfully offer a counterpoint to your position on the collapse of Silicon Valley Bank and the possibility of government bailouts.

    Firstly, it is important to note that not all bank failures are solely the result of risky investments by the bank. Banks can fail for a variety of reasons, including economic downturns, unforeseeable events, and mismanagement by the bank's leadership. In such cases, it may be appropriate for the government to intervene to prevent a systemic financial crisis.

    Secondly, depositors who exceed the FDIC limit may not necessarily be responsible for the bank's failure, and thus should not be penalized for it. Many individuals and businesses are unable to spread their deposits across multiple institutions due to various reasons such as practicality, convenience, or preference. The fact that FDIC insurance exists in the first place is a recognition of the importance of protecting depositors and their money.

    Thirdly, the argument that bailing out banks creates moral hazard overlooks the fact that banks are already subject to numerous regulations and oversight measures designed to prevent reckless behavior. Additionally, it is not necessarily the case that all banks will engage in risky behavior simply because they know that they will be bailed out. Furthermore, the alternative of letting a bank fail and causing widespread economic damage is not necessarily a preferable option.

    Lastly, while it is true that a market downturn can create buying opportunities for real estate investors, it is important to remember that such downturns can also have significant negative consequences for individuals, families, and businesses. It is not necessarily appropriate to view economic crises solely as opportunities for personal gain.

    In conclusion, while responsibility and accountability are important principles in the financial sector, it is also important to recognize that there are times when government intervention may be necessary to prevent a systemic financial crisis. Additionally, depositors who exceed the FDIC limit should not be automatically penalized for a bank's failure, and it is not necessarily the case that all bank bailouts create moral hazard or encourage risky behavior.

    @J Scott @Paul Sofia @James Hamling @Bill F. @Carlos Ptriawan

  • J ScottPro Member
    Moderator
    Investor · Sarasota, FL · Member since 2008 · 18k+ posts · 17k+ votes
    3y
    Quote from @Costin I.:

    Hey'all, you been all baited by OP with his ChatGPT generated post. Here is a rebuttal to his "deep thoughts on the collapse of SVB", also thanks to ChatGPT in 3 seconds:

    Yes, I pretty much completely agree.

    Here are my more detailed thoughts from today's BP Podcast:

    https://www.biggerpockets.com/...

  • Real Estate Agent · Sisters, OR · Member since 2014 · 1k+ posts · 1k+ votes
    3y
    Quote from @J Scott:
    Quote from @Costin I.:

    Hey'all, you been all baited by OP with his ChatGPT generated post. Here is a rebuttal to his "deep thoughts on the collapse of SVB", also thanks to ChatGPT in 3 seconds:

    Yes, I pretty much completely agree.

    Here are my more detailed thoughts from today's BP Podcast:

    https://www.biggerpockets.com/...


     I wanted to push on little on your appearance on the podcast.  You seem to be apologizing to extent for the Fed stepping in to "prevent panic."  Am I reading you right?  I know you're an econ guy and want to keep it there but the fact is the Fed has picked winners and losers and SF, Denver these big metros on the coast, folks like myself (to a small extent) who own assets have done well at the expense of the working class.  Do you disagree with that?

  • J ScottPro Member
    Moderator
    Investor · Sarasota, FL · Member since 2008 · 18k+ posts · 17k+ votes
    3y
    Quote from @Eric Bilderback:
    Quote from @J Scott:
    Quote from @Costin I.:

    Hey'all, you been all baited by OP with his ChatGPT generated post. Here is a rebuttal to his "deep thoughts on the collapse of SVB", also thanks to ChatGPT in 3 seconds:

    Yes, I pretty much completely agree.

    Here are my more detailed thoughts from today's BP Podcast:

    https://www.biggerpockets.com/...


     I wanted to push on little on your appearance on the podcast.  You seem to be apologizing to extent for the Fed stepping in to "prevent panic."  Am I reading you right?  I know you're an econ guy and want to keep it there but the fact is the Fed has picked winners and losers and SF, Denver these big metros on the coast, folks like myself (to a small extent) who own assets have done well at the expense of the working class.  Do you disagree with that?


    I'm not sure exactly what you're asking, but Let me try to answer the question I think you're asking...

    While I appreciate the difficult job the Fed has to do and I think it's an important job (I'm not one of those "abolish the Fed" type people), I haven't been overly thrilled with their policy decisions over the last decade.

    While the Fed should be impartial, with a focus on protecting the economy, they've become much too political, and way too reactionary.

    All that said, I very much agree with their approach to the recent banking issues.  Despite what a lot of people want to argue, they haven't bailed out the banks. SVB is going to go out of business, all employees will lose their jobs, and shareholders will lose their investments.

    What the fed and the FDIC have done -- so far -- is bailed out the regular guy. By protecting depositors, they are protecting the tens of thousands of employees of those depositors. Ensuring that the actions of the banks, which have been out of the control of the depositors, don't impact the families of all the people who just happened to be employees of those bank customers.

    As far as I'm concerned, bailing out depositors is always the right move.

    I'm not particularly thrilled that future fed policy will focus on keeping banks in business, but again, I think this is good for the regular guy.  If everybody we're to start moving their money to the large banks and away from regional and local banks, we'd end up with just a few big banks, which is bad for consumers.

  • Real Estate Agent · Sisters, OR · Member since 2014 · 1k+ posts · 1k+ votes
    3y
    Quote from @J Scott:
    Quote from @Eric Bilderback:
    Quote from @J Scott:
    Quote from @Costin I.:

    Hey'all, you been all baited by OP with his ChatGPT generated post. Here is a rebuttal to his "deep thoughts on the collapse of SVB", also thanks to ChatGPT in 3 seconds:

    Yes, I pretty much completely agree.

    Here are my more detailed thoughts from today's BP Podcast:

    https://www.biggerpockets.com/...


     I wanted to push on little on your appearance on the podcast.  You seem to be apologizing to extent for the Fed stepping in to "prevent panic."  Am I reading you right?  I know you're an econ guy and want to keep it there but the fact is the Fed has picked winners and losers and SF, Denver these big metros on the coast, folks like myself (to a small extent) who own assets have done well at the expense of the working class.  Do you disagree with that?


    I'm not sure exactly what you're asking, but Let me try to answer the question I think you're asking...

    While I appreciate the difficult job the Fed has to do and I think it's an important job (I'm not one of those "abolish the Fed" type people), I haven't been overly thrilled with their policy decisions over the last decade.

    While the Fed should be impartial, with a focus on protecting the economy, they've become much too political, and way too reactionary.

    All that said, I very much agree with their approach to the recent banking issues.  Despite what a lot of people want to argue, they haven't bailed out the banks. SVB is going to go out of business, all employees will lose their jobs, and shareholders will lose their investments.

    What the fed and the FDIC have done -- so far -- is bailed out the regular guy. By protecting depositors, they are protecting the tens of thousands of employees of those depositors. Ensuring that the actions of the banks, which have been out of the control of the depositors, don't impact the families of all the people who just happened to be employees of those bank customers.

    As far as I'm concerned, bailing out depositors is always the right move.

    I'm not particularly thrilled that future fed policy will focus on keeping banks in business, but again, I think this is good for the regular guy.  If everybody we're to start moving their money to the large banks and away from regional and local banks, we'd end up with just a few big banks, which is bad for consumers.

    I did tiptoe around the question but you answered it for the most part.  I disagree whole heartily that keeping all these venture capitalists and tech start ups solvent is looking out for the little guy.  And I wish that there was some BP brass that had the same view point as myself.  

    I very much appreciate your response and engagement. 

    Good Luck on all your future success,
  • J ScottPro Member
    Moderator
    Investor · Sarasota, FL · Member since 2008 · 18k+ posts · 17k+ votes
    3y
    Quote from @Eric Bilderback:
    I did tiptoe around the question but you answered it for the most part.  I disagree whole heartily that keeping all these venture capitalists and tech start ups solvent is looking out for the little guy.  And I wish that there was some BP brass that had the same view point as myself. 
     

    What happens to the literally tens of thousands of employees if those companies go broke?

    And while you may hate VCs, what happens to tech industry -- including millions of jobs, comprising over $2T in GDP, and securing the our position as a world superpower -- should they just go away?

    In my opinion, you don't have to like VCs or tech entrepreneurs to want to protect the tech industry.  

    Just my $.02...

  • Member since 2022 · 485 posts · 216 votes
    3y
    Quote from @J Scott:
    Quote from @Eric Bilderback:
    I did tiptoe around the question but you answered it for the most part.  I disagree whole heartily that keeping all these venture capitalists and tech start ups solvent is looking out for the little guy.  And I wish that there was some BP brass that had the same view point as myself. 
     

    What happens to the literally tens of thousands of employees if those companies go broke?

    And while you may hate VCs, what happens to tech industry -- including millions of jobs, comprising over $2T in GDP, and securing the our position as a world superpower -- should they just go away?

    In my opinion, you don't have to like VCs or tech entrepreneurs to want to protect the tech industry.  

    Just my $.02...

    So in other words your saying it doesn’t make sense to give up on services in our “services” economy? 
     

  • J ScottPro Member
    Moderator
    Investor · Sarasota, FL · Member since 2008 · 18k+ posts · 17k+ votes
    3y
    Quote from @Michael Wooldridge:

    So in other words your saying it doesn’t make sense to give up on services in our “services” economy? 
     

    If you want to secure your place as the world superpower short-term, you need to control the reserve currency.

    If you want to secure your place as the world superpower mid-term, you need to control innovation.

    If you want to secure your place as the world superpower long-term, you need to control education.

    The tech industry in the US is the second piece of that equation...

  • Member since 2022 · 485 posts · 216 votes
    3y
    Quote from @J Scott:
    Quote from @Michael Wooldridge:

    So in other words your saying it doesn’t make sense to give up on services in our “services” economy? 
     

    If you want to secure your place as the world superpower short-term, you need to control the reserve currency.

    If you want to secure your place as the world superpower mid-term, you need to control innovation.

    If you want to secure your place as the world superpower long-term, you need to control education.

    The tech industry in the US is the second piece of that equation...


    No argument. It was tongue in cheek. Folks rarely look past the now. Tech is a major stranglehold we have overall. And since business strategy is now tech strategy… No argument with me on the value. Or the value of the start-ups - which will continue to do very well which is why SVB will be bought.  

  • Real Estate Agent · Sisters, OR · Member since 2014 · 1k+ posts · 1k+ votes
    3y

    Same thing would happen to the businesses that held their deposits at SVB that happened to all the communities, businesses, families that worked and depended on a mill when they shut down logging or the same thing that happens when companies outsource production overseas and close whatever production factory.  You go bust and your community becomes depressed.  But hey at least they couldn't tell the folks in Silicon Valley they need to learn to code.  LOL 

  • Member since 2022 · 485 posts · 216 votes
    3y
    Quote from @Eric Bilderback:

    Same thing would happen to the businesses that held their deposits at SVB that happened to all the communities, businesses, families that worked and depended on a mill when they shut down logging or the same thing that happens when companies outsource production overseas and close whatever production factory.  You go bust and your community becomes depressed.  But hey at least they couldn't tell the folks in Silicon Valley they need to learn to code.  LOL 


    It’s about the question of scale and systemic impact. Might not be fair but life rarely is and it is logical.
     

  • Bruce WoodruffPro Member
    Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
    3y
    Quote from @J Scott:
    What the fed and the FDIC have done -- so far -- is bailed out the regular guy.

    By protecting depositors, they are protecting the tens of thousands of employees of those depositors. 

    Protecting billionaire corporate business interests is not protecting 'the little guy'.

    Your argument that they are thereby saving thousands of jobs may be true, but that is a slippery slope to go down. Anyone could use that to justify almost anything......

  • Member since 2022 · 485 posts · 216 votes
    3y
    Quote from @Bruce Woodruff:
    Quote from @J Scott:
    What the fed and the FDIC have done -- so far -- is bailed out the regular guy.

    By protecting depositors, they are protecting the tens of thousands of employees of those depositors. 

    Protecting billionaire corporate business interests is not protecting 'the little guy'.

    Your argument that they are thereby saving thousands of jobs may be true, but that is a slippery slope to go down. Anyone could use that to justify almost anything......

    Least bad option. Simple as that. 
     

    But hey if we ever want to make criminal charges / lifetime bans tied to stuff like this is financial system - I’m all for it. Because that would solve it over time.

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